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You’ve been Goxed again!

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Way back in 2012, I invested £1,000 in bitcoins on Mt.Gox, the Japanese-based exchange that was the most popular platform at that time for trading in said currency. Then they got hacked and went bankrupt in 2014. You may remember but, just in case:

Launched in 2010, it was handling over 70% of all bitcoin (BTC) buys/sells worldwide by early 2014, when it abruptly ceased operations amid revelations of its involvement in the loss/theft of hundreds of thousands of bitcoins, then worth hundreds of millions in US dollars.

At that time, my £1,000 investment had risen to around £15,000, so I was pretty annoyed – a fellow crypto guy said to me “YOU’VE BEEN GOXED!” – but it taught me a lesson: don’t keep your crypto on unregulated exchanges. In fact, ideally use a cold wallet, although they can be lost.

Anyway, I thought that was going to be the end of it but, after a while, I was contacted by a fund left over from Mt.Gox to sort out those who had claims via Kraken. So, I made my claim. That was about eight years ago and, as time goes by, I wasn’t sure that this would result in anything. Equally, the claims account kept adding more and more layers of identification and security.

It started with register your identity using a passport; then they added second level authentication with Google Authenticator; then they needed me to register my bank account for any payment; and more and more hoops to jump through. I jumped through all the hoops.

Ten years later, the Rehabilitation fund paid out … woo-hoo! I knew it would be about 25% of whatever funds I had the exchange so I went 15 bitcoins x $70,000 – 75% would be around $250,000 … the payment came through this week and it was – big drumroll - $5,000. In other words, they paid out at the value of the bitcoins at the time of the exchanges’ collapse … bugger. In fact, it left me feeling that, after a decade of discussions, I've been Goxed again. It also makes me wonder that, if they had kept bitcoin back in 2014 and worked the fund, what happened to them? Did they sell them in 2014 or are they dodging the losses?

The thing is, being Japanese, I know they will be honourable and guess that this is the valuation made at the time of collapse based on bitcoins they had which are now lost. That’s what I hope is the truth anyway.

What is interesting for me is that this has been a twelve year journey, and finally has some resolution. Meanwhile, I did buy some physical bitcoins around 2016 – bitcoin addresses wrapped inside a bitcoin physical coin. These are cold wallet bitcoins and no-one can get them, but they are physical and guess what? Can’t remember where I put them.

Guess I’ll go and start digging through that landfill for the $500 million worth of lost crypto.

 

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Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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